Has fracking reached peak sand?

Texas oil is booming, and so are the sand mines needed for fracking the wells. But hydraulic fracturing leader Halliburton is warning that its surging sand use is finally topping out, and maybe even falling.

Fairmount Santrol, an Ohio company, announced this week it will build yet another sand mine in the Permian Basin to churn out more Texas sand, which is mixed with water and chemicals to crack open the shale rock and release the crude oil. With several new mines proposed, frac sand production Texas could more than double within two years, adding about 30 million tons annually.

As drillers have pushed to become more efficient in producing oil, wells have become deeper and longer, and the amount of sand used to frac each well has surged. The largest wells now consume up to 25,000 tons – 50 million pounds – of sand each, up from 1,500 tons, or about 3 million pounds, just a few years ago.

Still, Fairmount Santrol’s news comes just as Halliburton said it saw its sand usage per well decline in the second quarter for the first time. With sand costs rising and availability temporarily limited, Halliburton is developing injection chemicals that can help increase the oil flow from wells as opposed to simply blasting more sand.

“Sand is not infinite, and it’s not free,” Halliburton CEO Jeff Miller said.

Energy analysts, however, said the data still points to the amount of sand used per well growing, even if the pace has slowed. Halliburton buys its sand and produces its own injection chemicals, so the company stands to financially benefit by touting chemicals and downplaying sand, analysts said.

Jamees West, an energy analyst at Evercore ISI in New York, said Halliburton’s decline in sand use is more a blip reflected by temporary sand shortages before new mines open up.

“You’re still seeing increased amounts of sand being consumed overall,” West said.

Raymond James energy analyst Praveen Narra agreed that Halliburton’s reduction in sand is more of a hiccup than a trend. While sand usage eventually will peak, the industry is “still a decent ways away from that phenomenon,” Narra added.

Still, Miller’s comments caused the stock values of sand producers to plummet Monday as concern grows that new sand production is coming online. Fairmount Santrol’s stock fell by nearly 15 percent on Monday before rebounding a little on Tuesday.

Fairmount’s stock has plunged 80 percent from its January peak of nearly $13 a share to a closing price Tuesday of $2.70 per share.

Most frac sand has historically come from the fine-grain “northern white” sand from Wisconsin and Minnesota, but the rapidly growing demand and longer travel distance have pushed companies to build more sand mines in Texas to serve the booming Permian Basin. The Texas brown sand isn’t of quite as high a quality, but proponents argue it’s not far off. The Texas sand also is cheaper and much closer.

As for Fairmount Santrol’s latest project, the company signed a 40-year lease to open a mine on 3,250 acres of sand reserves near Kermit in Winkler County in the Permian Basin. The mine has reserves of about 165 million tons of fine-grade sand. The proposed mine is expected to churn out 3 million tons of sand annually. Fairmount is planning to spend $110 million to build the mine and have it opened by mid-2018.

Texas sand companies are growing as well. Smart Sand, of The Woodlands, recently went public to help fuel its expansions. Houston-based Hi-Crush Partners is building a mine at the former Dunes of Kermit. Emerge Energy Services, a Fort Worth company, bought a recreational mine south of San Antonio that sells sand to golf courses that it will transform into a much larger frac sand mine operation.

A project by Pennsylvania-based Preferred Sands is moving the location of another proposed mine outside of San Antonio because of environmental and truck traffic concerns, but the mine is still moving forward. U.S. Silica, of Maryland, and Unimin Corp., of Connecticut, also are building Permian mines.

All frac sand could disappear tomorrow and it wouldn’t kill frac’ng. At worse it would increase the cost by going to manmade ceramic proppants. In fact, in high pressure/deep reservoirs it has been preferred because the ceramics won’t crush as easily as sand. The last 3 frac jobs the Rockman used manmade ceramics:

“Right now the ceramic alternatives are more expensive, but companies are experimenting with different ways to bring the cost down. One idea is to manufacture it near where the fracking is taking place, using local clay.

“If they can manufacture it here it’d be very close to the source,” said Ed Murphy, North Dakota’s state geologist. Murphy studied clay deposits in western North Dakota and found many were rich in kaolin and had aluminum oxide — two important ingredients for ceramic proppants. The state has provided maps and other analysis to companies that might be interested in using the clay to manufacture proppants.”

IOW no need to run around like your hair is on fire. LOL.

Cloggie on Wed, 26th Jul 2017 10:25 am

An unexpected angle. So fracking in Texas requires 30 million tons of sand annually. I trust EROI calculators (is that a profession?) included this exercise in their calculations. Assume trucks of 30 tons, that 1 million journeys between the sand mine and fracking well (how many miles?). 30,000,000 ton/year is the equivalent of horizontal transport of 10,000 6MW offshore wind turbines.

Wind and solar do not require sand mining and transport. And have no dry holes either. Install 3000 ton of steel once for a 6MW onffshore wind turbine and you can harvest 144,000 kWh or 88 barrel/day for 30 years (with some maintenance in between) or 1 million barrel in 30 years life time:

So install 2.8 windturbines in the North Sea every day and your have (over 30 years) the same amount of energy as Texas produces in a day.

Wind turbine maintenance cost is typically ca 10% of installation cost, so we can ignore that for a moment.

So if day in day out, wind farm developers in the North Sea keep up a pace of 2.8 turbines per day, they produce the same cumulative energy Texas does, only smeared out of 30 years.

Once they have 2,800,000/88 = 31818 turbines installed they generated just as much energy as Texas does on a daily basis. If they install 100,000 turbines, they harvest just as much energy as the entire US oil business.

Prospects are 200,000 turbines for 2050.

Cloggie on Wed, 26th Jul 2017 10:51 am

And the beauty is that these wind turbines can be completely recycled at end of life.

The turbines in the video were dismantled because they were economically end of life, not because they were about to fall over. The Eiffel tower is around for 130 years and can easily survive another 300 years. Wind turbine towers same story. And once they are really end-of-life you dismantle them as shown in the video and you bring them to the smelter, operated on (pay attention Greg!) electricity from 200,000 North Sea wind turbines.

But in 100 years we will probably have fusion figured out.

Outcast_Searcher on Wed, 26th Jul 2017 11:08 am

Good points both Rockman and Cloggie. The idea that we can make sand (for a cost) came to mind right away, and Rockman conveniently just verified it.

And thanks Cloggie for doing a little arithmetic. All these “it can’t be done” doomers seem to favor intuition and hyperbole (and a dramatic sense of dread) over simple arithmetic.

In my experience, arithmetic and logic will tend to win out over time.

(The clowns on the far left that claim oil and ICE’s are “done” in “a few” or even under 10 years are also innumerate clowns. But pretending like clean energy can never replace the VAST majority of basic transport use is just as innumerate).

Davy on Wed, 26th Jul 2017 12:18 pm

“In my experience, arithmetic and logic will tend to win out over time.”
In our experience arithmetic and logic worked well at destroying a planet. Look around you are don’t you see it?

“it can’t be done” doomers seem to favor intuition and hyperbole (and a dramatic sense of dread) over simple arithmetic.”
There is a whole lot you haven’t done yet so let’s not get the horse ahead of the cart. We doomers are just asking you to be reality based. You techno optimist cornucopians manufacture reality routinely and wonder why you are called out. I want the same thing you do. What I don’t want is false hope. I am a product of the 20th century when we were spoon fed the shit. Those days are over for me so show me real numbers and don’t talk out of school if it has not been done yet. There are far too many examples of the marketing of dreams and cons.

Plantagenet on Wed, 26th Jul 2017 12:25 pm

Wind turbines kill eagles, falcons and other birds on the endangered species act. If the act is ever enforced again, the wind turbines will have to be shut down.

Cheers!

shortonoil on Wed, 26th Jul 2017 1:22 pm

Strip mine Texas to produce oil with borrowed imaginary money that came from a central bank printing press. Its called eating your seed corn!

goat1001 on Wed, 26th Jul 2017 2:14 pm

Too many wind turbines and you hit peak wind…

Plantagenet on Wed, 26th Jul 2017 3:26 pm

When we hit peak wind we’ll just strap politicians to the windmills and let them argue with other.

Cheers!

rockman on Wed, 26th Jul 2017 3:52 pm

“Wind turbines kill eagles, falcons and other birds on the endangered species act.” Actually so do commercial and private aircraft. And so do buildings and rarely autos and incompetent hunters. I don’t see flights and hunting shut down anytime soon. Nor buildings being torn down. LOL.

But that was the only protest against the big coastal wind farm in Texas. They were given no serious consideration.

rockman on Wed, 26th Jul 2017 3:57 pm

Cloggie – The actual they do use sand for the concrete pads turbines are sert on. Obviously not a lot per turbine. But then multiply by tens of thousands of installations.

Of course EROEI is no more relevant to the economics of wins farm investment the drilling oil/NG wells.

Cloggie on Wed, 26th Jul 2017 4:33 pm

Cloggie – The actual they do use sand for the concrete pads turbines are sert on. Obviously not a lot per turbine. But then multiply by tens of thousands of installations.

Forget about land based wind turbines, in Europe it is mostly offshore now; far higher winds speeds and easier installation… if you have the specialized equipment.

In the wake of the EROI discussion for wind & solar tonight I did some back-of-an-envelope calculations.

By far the largest energy input in the construction of a wind turbine from iron ore is in the steel mill.

It costs 20 GJ or 5555 kWh to produce 1 ton of steel. A 6 MW offshore wind turbine has roughly the following measures:

monopile: 2200 ton
tower: 650 ton
nacelle: 350 ton
Total: 3300 ton

No foundation, just ram the monopile into the sea floor.

Energy cost steel production: 3300 * 5555 = 18331500 kWh

In the North Sea this 6 MW wind turbine on average (not nameplate!) produces 144,000 kWh/day

Payback time: 18331500/144000 = 127 days

There is of course extra: you need to get the iron ore from say Australia (worst case in transport energy terms).

In other words: the offshore wind turbine must work for less than half a year to “earn” itself back in energy terms.

The other items like rotor (3 * 30 ton), construction of the gear, generator, etc, handling have far smaller energy cost. Add a few days and arrive at half a year.

On top of 1/3 of steel production comes from scrap metal which requires far less energy to turn into new steel.

Additionally: in the future (re)cycles you can reuse the steel of the old turbine. You don’t have to get the iron from Australia anymore and recycling of steel costs far less than producing steel from ore.

Assuming a very conservative life cycle of 30 years for the turbine, EROI of offshore wind is therefore 60 or (much) higher.

Go Speed Racer on Wed, 26th Jul 2017 4:55 pm

Well Clogster, I can recycle a windmill.
Can of gasoline, dump in 5 gallons, inside each blade, while rotating. Light fuse and get away.

No shortage of sand. I will sell all U need. $800 per cubic yard and delivery extra.

boat on Wed, 26th Jul 2017 4:56 pm

davy,

1 percent of electric growth from renewables seems small. The current market share for renewables sits at 10 percent. In 20 years that would equal 30 percent. The price for renewables has been dropping rapidly and new tech will continue. This is a minimal forecast, that 30 percent number may end up much higher, depending on tech breakthroughs. That aint hyperbole or hope. I would call it a reasonable assement of current trends.
Btw a 4.5 billion wind farm was just announanced in the US.

Apneaman on Wed, 26th Jul 2017 5:48 pm

Will the lawyer fees be factored in to the EROEI?

100 Fossil Fuel Companies Responsible for 71 Percent of Carbon Emissions Since 1988 — And They’re Being Sued For it

“According to research from the Carbon Disclosure Project, since 1988, 100 fossil fuel producers have been responsible for 635 billion tons of greenhouse gas emissions. This total represents 71 percent of human carbon emissions that have occurred over the past 29 years.

Companies involved in this massive carbon emission included such giants as ExxonMobil, Shell, BHP Billiton and Gazprom. The report also found that these 100 companies were responsible for fully 52 percent of all emissions since the industrial revolution began in 1751.

Report authors went on to point out that this relatively small group of companies is likely to have an outsized influence on responses to climate change — hopefully adding that positive action by such corporations could produce significant positive change. However, historically, such companies have tended to fight against global climate treaties, misinform the public on dangers related to human-caused climate change, and work to delay responses to climate change within their host nations. Due to this past bad-economic-actor behavior combined with rising climate change related damages, these corporations also are exposed to what may well be a historic and unprecedented corporate liability.”

“According to the San Diego Union Tribune:

Attorneys for the plaintiffs said they modeled their legal tactics after past efforts to hold accountable cigarette businesses, makers of cancer-causing agents and gas and chemical companies that used methyl tertiary butyl ether (MTBE), a gasoline additive that has contaminated groundwater across the country.

And though not all liability related lawsuits against major tobacco and chemical companies were successful, those that stuck resulted in major awards even as the lawsuits themselves produced a very harmful public relations impact for the companies involved.”

100 Fossil Fuel Companies Responsible for 71 Percent of Carbon Emissions Since 1988 — And They’re Being Sued For it

In fact the oil majors did not cause large emissions. They merely sold the gasoline to car driving cancer monkeys like apneaman. It is him who should be sued.

Apneaman on Wed, 26th Jul 2017 5:58 pm

If you’re a Cancer and you know it…..

100,000 newly released pages of Chemical Industry secrets “lay out a 40-year history of deceit and collusion involving the chemical industry and the regulatory agencies that were supposed to be protecting human health and the environment.”

Cloggie – Exactly. But don’t expect the A-man to admit he’s part of the collective that DIRECTLY PRODUCE the vast majority of GHG. The guilt he must feel as being one of the ff consumers responsible for climate change can only be buried by deflecting it towards ff producers. Those ff producers who only conduct their business because the consumers pay them to do so. Yes: the industry makes a living producing ff. But the consumers run their lives by turning ff into GHG.